Asia Pacific Financial Services Regulatory Updates, Quarter Two 2021
The Deloitte Asia Pacific Centre for Regulatory Strategy is pleased to share with
you the key regulatory updates from around our region for Q2 2021.
Moving from pandemic to endemic: More than a year since COVID 19 was
declared a global pandemic, the world is gradually learning to live with COVID
19 as an endemic disease. Vaccination rates are rising albeit unevenly and
some countries are taking cautious steps to open up.
Financial regulators are adjusting to the new normal too. After dealing with the
massive COVID 19 disruption last year, regulators are refocusing on several key
global regulatory initiatives like Basel III Final Reforms and LIBOR transition.
But it is not simply "business as usual" for the regulatory community. In line
with the "Build Back Better" agenda, a few themes are emerging among
Operational Resilience: The unprecedented disruptions caused by COVID 19
has led to increased supervisory focus on operational resilience. Rapid adoption
of alternative digital channels and work from home arrangements, together with the increased threat of cyber attacks, have added to supervisory concerns.
Globally, the Basel Committee has issued a set of Principles for Operational
Resilience. The HKMA has asked financial institutions to adopt the Basel
guidelines, while MAS has provided additional guidance on Risk Management
and Operational Resilience in a Remote Working Environment.
Operational resilience straddles several areas, including business continuity
management, cybersecurity and outsourcing risk management. In HK, financial
institutions are being asked to consider the need for secure tertiary data backup
to safeguard their operations in the event of cyber attacks . New Zealand has
issued new cyber resilience guidance and India has published Guidelines for
Managing Risks in Outsourcing for co operative banks. Malaysia based e money
issuers may soon need to segregate customer funds and implement enhanced
business continuity, outsourcing and technology safeguards.
Sustainability: Another development is that regulators have become more
sensitive to the role that finance could play in promoting a sustainable economic recovery from COVID 19. They are doing so by providing regulatory guidance on how financial institutions should manage and disclose climate related risks as well as on consistent standards for structuring green finance transactions.
APRA and JFSA are consulting on draft guidance on Climate Change Financial
Risks and Climate Transition Finance respectively. In Malaysia, the BNM
published a principle based taxonomy to help financial institutions assess and
categorise economic activities according to the extent to which they support
climate objectives. Such taxonomy will promote standardised reporting of
climate related exposures and strengthen accountability and market
In Singapore, the Green Finance Industry Taskforce has developed a framework
for green trade finance transactions, together with the recommended industry
certifications. The taskforce has also proposed a roadmap for scaling green
finance in the real estate, infrastructure and fund management sectors. In
addition, workshops and e learning modules will be launched to develop local
capabilities in environment risk management.
Culture and Conduct: Finally, regulators are focusing on culture and conduct
matters to ensure that the financial sector is built on sound ethical and
governance foundations. Both China and Japan have introduced new corporate
governance requirements for bancassurance and listed companies respectively.
Australia have issued guidance on remuneration practices and financial advice
fees, while Korea has put in place additional investor protection measures for
For queries or more information on these updates or other regulatory topics,
please get in touch.